It's time for some more predictions! Last time I did that I was, if anything, too conservative Although, the section of "Black Swans" at the bottom was particularly accurate... (and has NOT been edited since it was written). So here goes! Where do I think common opinion is wrong, especially in South Africa?
Electric vehicles and renewables
1. By 2030, 40%+ of new cars sold in South Africa will be pure electric, with East Africa (eg Kenya) a bit behind, and West Africa a bit further behind. This seems inevitable when looking at the promises from major Western car companies, and the pace of innovation and falling prices from Chinese car companies.
2. Due to 1., by 2030 the demand for petrol in South Africa will be falling 3%+ per year; and electricity demand will be growing 1% per year due to electric cars (though it may be falling for other reasons).
3. Despite decarbonisation of electricity, and the growth of electric cars, the price of electricity in major global markets will NOT rise significantly from today's levels, and may even fall, due to rapid rollout of solar and other renewables. South Africa is a special case depending on Eskom's finances.
4. By 2030, there will be large businesses built on taking advantage of near-free electricity during sunny hours (e.g., bulk hydrogen production), in several global markets.
5. There will never again be a major (>300MW) coal power station built in South Africa.
6. Kusile coal power-station will stop operating (or at least have been converted off coal) well before 30 years (2050), despite a design lifetime of 50+ years (around 2070). Which means an even bigger disaster for its return on capital.
Consumer trends over next 10-15 years
1. The distinction between FMCG company / "brand" (designs and coordinates the manufacture of products, high margins, high marketing spend %, little direct consumer interaction) and retailer (sells products from brands, low margin, high volume, low marketing spend %) will continue to blur in both directions, to an effective spectrum; plus there will be new logistics business models beyond traditional retailers, that aggregate deliveries from multiple other players (i.e., Instacart model evolved further).
2. Traditional monolithic brands will fragment in favour of increasing numbers of niche brands with more authenticity and story. New "meta-brands" will appear, in the form of structured ranges of endorsements by influencers.
3. By 2030, 20%+ of "meat-like" products sold in upper-end grocery stores will be plant-based (i.e., non-animal).
4. By 2035, we will routinely take individualised medical probiotics in order to tune our gut biota, as treatment for a wide variety of complaints.
1. By 2035, it will be functionally impossible for "legitimate" companies and individuals to use tax havens and financial engineering to pay near-zero taxes on profits or income.
2. There are fortunes that will still be made in simplifying the payment of paper (or PDF) invoices, using machine learning text recognition to automatically load payment requests via bank apps/APIs. This will happen far faster than we can persuade people to stop using paper-based invoices for billing.
By Paul Cook, in personal capacity. Predictions are not the opinion of any organisation, including Silvertree. See past article: Predictions for the next 10, 20, 30 years